Debt, Social Security trouble separate issues

Please let Robert Samuelson know that I respectfully disagree with his admonition that “Social Security must be part of deficit-reduction talks” (Herald, Dec. 3).

Social Security must be viewed for what it is to understand its future problem. It consists of two insurance policies for working Americans to protect them from living in poverty when they are unable to work: Old Age and Survivor’s Insurance and Disability Insurance. These policies are “sold” by the Social Security Administration, a nonprofit “company.” Premiums are paid by working Americans and their employers in the form of payroll taxes.

As with any insurance company, premiums pay for claims and SSA invests any surplus to pay future claims. SSA invests in special U.S. Treasury bonds. Because of demographics and increasing life expectancy, claims recently exceeded premiums and SSA redeemed some bonds. This causes a problem for the federal government because it must use some of its general fund revenue to pay. Projections made in 2010 indicate disability insurance investments will be depleted by 2018 while OASI investments will last until 2024. Then the company will be bankrupt.

Something needs to be done: Premiums could be raised, benefits reduced and/or the conditions under which benefits are paid must be implemented. Or SSA, as so many private businesses do, could get the federal government to subsidize its operation. Any change of SSA’s business plan requires approval from our elected officials, who rarely seem to agree. Some even want to turn the business back to the private sector as it was before the Great Depression. To conflate the Social Security problem with the pressing problem of federal debts growing faster than revenue will only confuse them more.

Medicare and Medicaid are different issues, both being dependent on general fund revenue.